If there is one certainty about the energy business, it’s that you never know what tomorrow will bring.
Chairing a prominent and influential organization such as the INGAA Foundation is much more than an honorary title. It is bestowed upon individuals with an astute knowledge of the natural gas transmission pipeline business who are willing and capable of pushing members to meet higher standards of workmanship that benefit the industry and ultimately the public.
Rob Riess is 2016 chair of the Foundation, which along with “big brother” INGAA, which continues to face never-ending challenges. Riess is more capable of balancing the hefty job on his broad shoulders. He has over 36 years on both sides of the business, operations and construction. Today he is president and CEO of Sheehan Pipe Line Construction Co.
The low-price oil and gas environment is causing delays with a number of major construction projects. The Keystone XL rejection has re-energized the anti-fossil movement to attempt to block many, if not all, new projects. That’s just for starters. Read on.
P&GJ: Rob, as chair of the Foundation, what are your leading priorities for 2016, and how might they differ from what the Foundation focused on during 2015?
Riess: My leading priorities include a continuation of the efforts of our past chairman, Paul MacGregor, which is our continued pursuit of safety and quality excellence. We must continue on our journey of zero incidents and impeccable workmanship. We owe that to our industry workforce, the regulatory agencies and the public.
We must also try to give the public a better understanding of the natural gas industry, including who we are and the benefits natural gas provides to all sectors of the economy. Part of this involves our America’s Energy Link, a social media campaign we launched last year to help educate Americans on the benefits of natural gas and pipelines.
P&GJ: From your perspective, how is the industry faring in its effort to improve safety conditions? How much more needs to be done, or will this remain a continual work in progress?
Riess: We have made significant progress in the past several years on improving pipeline safety, and statistics show that. However, safety excellence is always a work in progress. We must be relentless in our pursuit of a zero-incident culture and when we achieve that, we must continue to pursue that culture to ensure we maintain that level of safety.
One of the tools the INGAA Foundation created a few years ago, and in use today, is the “Lessons Learned Repository.” INGAA Foundation members share safety-related incidents on a secured website to help others in the industry learn from these incidents. We also have recently expanded our safety commitment to include quality. We believe these two commitments go hand in hand.
P&GJ: What issues is the Foundation planning to invest in studies for 2016, and can we look to any ongoing studies being released in 2016?
Riess: The Foundation is currently completing a few ongoing studies, including one on how natural gas pipelines easements affect property values. Our big study for 2016 is the update of our flagship report on midstream infrastructure. We have been doing this study for decades, and will update it again this year. Not only does it look at natural gas midstream infrastructure, but also natural gas liquids and crude oil.
The report also quantifies the economic benefits of this capital investment. You can expect that report in the first half of 2016. We also are working on a number of studies and workshops related to pipeline safety, construction quality and safety and permitting. We will continue with our Americas Energy Link social media program as well.
P&GJ: Beyond a list of priorities for 2016, what are some of the pipeline-related issues and challenges that concern you and the membership?
Riess: One concern for our industry and our members is the ability to produce a qualified workforce, possessing the right training and equipment to engineer, design, permit and construct all the proposed pipeline projects over the next three to four years. This workforce not only includes construction workers but also engineers, technicians and inspectors.
The other huge concern is ensuring timely regulatory permitting of these projects. We have recently seen two major pipeline projects experience delays of up to a year in obtaining a FERC permit. This means that a significant amount of pipeline construction scheduled for 2016 will now be pushed back to 2017. What other projects will slip due to regulatory permits and how will that affect the ability of the limited workforce to get these projects completed?
P&GJ: In recent months, the administration seems to be backtracking in its support for natural gas, as we saw in the president’s climate change strategy. Does this concern you?
Riess: Anytime there is a shift in the political climate related to energy, we take notice. However, it is clear that natural gas is going to be part of the climate solution. Expanded use of natural gas in recent years has helped drive down U.S. carbon dioxide emissions, particularly as more gas is used to generate electricity. We believe that natural gas will continue to play an important role in the nation’s energy future.
P&GJ: What are some of the initiatives that the Foundation is supporting that are designed to improve the environment?
Riess: The Foundation has several studies and workshops in 2016 focused on the environment. The primary areas include the National Ambient Air Quality Standard for nitrogen dioxide, methane reduction, the National Ambient Air Quality Standard for ozone, and the FERC permitting process related to environmental issues.
P&GJ: As a contractor and active member of the industry, are you seeing an increase in the challenges facing pipeline developers? If so, where are these challenges emanating from? Environmental groups, local citizens’ organizations, social media?
Riess: The industry definitely is facing challenges. Some of the biggest include timely permitting, including federal, state and local permits. We continue to see increased opposition from environmental groups, local citizen groups, organizations and social media. The Foundation prioritizes safety and quality in every facet of our industry, and we need to continue that focus. Another challenge is to ensure that we have a sufficient workforce, trained and qualified to respond to the upcoming boom cycle.
P&GJ: Do you expect this situation to worsen as a result of the Keystone decision, and what can the industry do to combat this?
Riess: I do believe that the Keystone decision will continue to affect our industry. Some activist groups view it as a victory and may gain strength as a result. However, there are millions of Americans who benefit each day from the abundant, clean-burning, domestic and affordable natural gas the industry transports. We have a responsibility to educate them, and, hopefully, have them support our industry and upcoming projects.
P&GJ: With reports of a growing gas glut, what effect do you think this could have on construction activity in 2016?
Riess: The growing gas glut is not a concern but an opportunity for this industry to become an exporter of LNG. The natural gas pipelines expected to be constructed during 2016 have been in the planning stages for three to four years. The projects have been fully subscribed by the end user and only permit delays can jeopardize timely construction. We have already seen these permit delays affect two of the largest natural gas transmission projects in the Northeast, originally planned to be constructed in 2016.
P&GJ: Where do you see the most potential for new gas pipelines in 2016, including transmission and gathering?
Riess: The new transmission pipelines are primarily in the Northeast and the South, where they will move the abundant shale gas supplies to growing markets. Whether it is the Eagle Ford, the Marcellus or the Utica, the major transmission natural gas pipelines are moving this shale gas. There are others, like Sable Trail, which will deliver natural gas to power-generating stations in Florida. With regard to gathering, again I see the biggest development around the shale gas formations.
P&GJ: Is there any pending legislation before Congress or rules proposed by regulators that are of concern to the Foundation?
Riess: We are watching a few bills in 2016. Probably the most important is reauthorization of the Pipeline Safety Act. This bill reauthorizes the safety regulator, the Pipeline and Hazardous Materials Safety Administration (PHMSA), for four years and sets agency spending for those years. The bill, as it stands now, is relatively modest in scope because Congress wants PHMSA to finish the work still remaining from the 2011 pipeline safety reauthorization.
However, the bill will expand PHMSA’s jurisdiction to include underground storage, something INGAA supports. We also are eyeing a number of pipeline permitting bills in 2016. We hope that Congress can promote a more timely and transparent pipeline-permitting process.
P&GJ: Recently, Hillary Clinton suggested that FERC should consider expanding its comment period for individuals or communities concerned about new infrastructure. Does that concern you?
Riess: We believe individuals and the affected communities should have the ability to comment and express concerns. Current FERC rules sufficiently provide that opportunity.
P&GJ: What do you realistically hope to accomplish before turning the reins over to your successor?
Riess: My goals for the upcoming year are to focus on the continuous improvement process of the INGAA Foundation’s commitment to safety and quality excellence. In addition, we need to continue to educate the public and regulatory agencies about the natural gas industry, pipelines and the benefits of both.
P&GJ: The Foundation continues to show tremendous growth with new members continually joining. Is there any concern that the Foundation is growing too large to be effective?
Riess: The size of the INGAA Foundation does continue to grow and we have discussed this matter at the Executive Board meetings. Currently, we do not see a problem with the membership level. Generally, this growth supports and enhances our commitment to the natural gas industry. As the old saying goes: There is strength in numbers!
P&GJ: Finally, how did you get into the business?
Riess: This is a very interesting question. My background and aspiration have always been in the construction field. While attending the University of Missouri, Science and Technology (back in my days, the University of Missouri Rolla), one of my civil engineering classmates suggested I interview with a company out of Houston with whom he had just completed two summer internships. He had enjoyed the work, which involved overseeing the construction of natural gas pipelines.
I was fortunate enough to obtain an interview with this company when they came to Rolla for on-campus interviews. As it turned out, I interviewed with two natural gas pipeline companies and received offers from both. I accepted an offer from Texas Eastern in its construction department in August 1979 and have been associated with the natural gas industry for the past 36 years!
It is a small and close-knit group. Many of the folks I started with at Texas Eastern are still there today. It has been an interesting and challenging opportunity, and I would not change it for the world.